Correlation Between FutureFuel Corp and Crown Electrokinetics
Can any of the company-specific risk be diversified away by investing in both FutureFuel Corp and Crown Electrokinetics at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining FutureFuel Corp and Crown Electrokinetics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FutureFuel Corp and Crown Electrokinetics Corp, you can compare the effects of market volatilities on FutureFuel Corp and Crown Electrokinetics and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in FutureFuel Corp with a short position of Crown Electrokinetics. Check out your portfolio center. Please also check ongoing floating volatility patterns of FutureFuel Corp and Crown Electrokinetics.
Diversification Opportunities for FutureFuel Corp and Crown Electrokinetics
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between FutureFuel and Crown is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding FutureFuel Corp and Crown Electrokinetics Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Crown Electrokinetics and FutureFuel Corp is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on FutureFuel Corp are associated (or correlated) with Crown Electrokinetics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Crown Electrokinetics has no effect on the direction of FutureFuel Corp i.e., FutureFuel Corp and Crown Electrokinetics go up and down completely randomly.
Pair Corralation between FutureFuel Corp and Crown Electrokinetics
Allowing for the 90-day total investment horizon FutureFuel Corp is expected to generate 0.1 times more return on investment than Crown Electrokinetics. However, FutureFuel Corp is 9.56 times less risky than Crown Electrokinetics. It trades about 0.07 of its potential returns per unit of risk. Crown Electrokinetics Corp is currently generating about -0.03 per unit of risk. If you would invest 376.00 in FutureFuel Corp on November 3, 2024 and sell it today you would earn a total of 177.00 from holding FutureFuel Corp or generate 47.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
FutureFuel Corp vs. Crown Electrokinetics Corp
Performance |
| Timeline |
| FutureFuel Corp |
| Crown Electrokinetics |
FutureFuel Corp and Crown Electrokinetics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FutureFuel Corp and Crown Electrokinetics
The main advantage of trading using opposite FutureFuel Corp and Crown Electrokinetics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FutureFuel Corp position performs unexpectedly, Crown Electrokinetics can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Crown Electrokinetics will offset losses from the drop in Crown Electrokinetics' long position.| FutureFuel Corp vs. Oil Dri | FutureFuel Corp vs. Quaker Chemical | FutureFuel Corp vs. Ecovyst | FutureFuel Corp vs. Minerals Technologies |
| Crown Electrokinetics vs. Coroware | Crown Electrokinetics vs. Loop Industries | Crown Electrokinetics vs. Hudson Technologies | Crown Electrokinetics vs. General Environmental Management |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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